ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Statutory Liquidity Ratio
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Cash Reserve Ratio
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Bank Rate Reverse
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Repo Rate
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Detailed explanation-1: -The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve Bank of India with reference to the demand and time liabilities (NDTL) to ensure the liquidity and solvency of the Banks.
Detailed explanation-2: -Net Demand and Time Liabilities (NDTL) Demand deposits consist of all liabilities, which the bank needs to pay on demand. They include current deposits, demand drafts, balances in overdue fixed deposits, and demand liabilities portion of savings bank deposits.
Detailed explanation-3: -Net Demand and Time Liabilities (NDTL): It is the difference between the sum of demand and time liabilities (deposits) of a bank (with the public or the other bank) and the deposits in the form of assets held by the other banks.
Detailed explanation-4: -Commercial banks are required to maintain an average cash balance with the RBI, the amount of which shall not be less than 3% of the total of Net Demand and Time Liabilities (NDTL) on a fortnightly basis.